Uncle Sam is the world’s biggest client. Yet, many boutique service firms do not do business with the government. This session is for firms who do not do business with the government but wonder if they should. We will cover the basics such as why elections matter, understanding legislation, and partnering.
Greg Alexander [00:00:10] Hi, everyone. This is Greg Alexander, the host of the Pro Serve podcast. Brought to you by Collective 54, the first community dedicated to the boutique professional services industry, and on today’s episode, we’re going to talk about doing business with the government, and the reason why I picked this subject is most of our members are focused exclusively on the private sector, and there is an opportunity potentially to grow their firms by learning how to do business with the government. And on this episode, we’ve got a role model and expert in this area. His name is Frank. Frank, I always mispronounce your last name. Would you pronounce it for me, please?
Frank Tsamoutales [00:00:58] Tsamoutales.
Greg Alexander [00:00:58] Tsamoutales. I don’t know why I can’t get that, but I’ll commit that to memory. So. Would you please introduce yourself and your firm to the group?
Frank Tsamoutales [00:01:08] Sure, Greg. Thank you very much. Before I introduce myself, I just want to say I’ve always been a huge fan and believer in mastermind groups and collaborating with people that bring different frames of reference to the conversation. And I just want to congratulate you on the team on collective efforts. In the short time we’ve been involved, we have picked up many gems that are already having greater moments for our firm’s growth and value. And I want to thank you and everybody, a collective, collective 50 for including all my fellow members who have been very open and candid and provided a lot of those gems along with yours. So thank you for this opportunity as well as in terms of an introduction, we we are a government relations business development firm. We’re unique in a couple of ways. And I know that sounds probably a little maybe not so authentic of a statement to make, but but I’ll explain why we feel that way about it. But we really focus on solving problems that keep leaders up at night, whether it’s a founder, a CEO, CFO, or even government officials or community leaders. And we’re pretty open minded about the range of those kind of problems. But what we’ve learned time and time again throughout our 40 years of doing this, the intersection of business and government can have a tremendous positive and negative impact on a business. So we try and avoid those pits involves for our partners and clients and at the same time are available to them when in fact they do get blindsided that there’s an issue they just can’t quite tackle, whether they’re regulated or whether they are selling goods and services to the government or exploring opportunities in that regard as you as you opened up this podcast.
Greg Alexander [00:03:14] Perfect. Well, again, thank you for being here. You’re going to be a wonderful guest today in preparation for our time together. I spoke to some members and I asked them, you know, what they would want to hear about. So I’ve got a few questions and I’m going to jump into those. And these are going to be in the category of kind of the basics, the starting point for our members, as is. Many of them don’t even know, you know, how do you even get started? The first question that I had from a member was, you know, what does a advocacy group or a lobbying firm actually do? And is it wise for somebody in our community, which is, you know, the founder of a small services firm, is it wise for them to, you know, approach one of those firms and and ask to partner with them?
Frank Tsamoutales [00:04:03] I think that’s a good question. And I’m going to I’m going to just say not so fast. So let me just maybe frame up kind of the the environment a little bit, but the little time that we have, I’ll do my best to be suspect and then and then answer, but hopefully it’ll help answer the question as well. First and foremost, elections matter. Underline Circle asked her to highlight that. And so what a small professional services company or mid-sized professional service company has to be careful of is not to investigate purely opportunities that may be born from a new administration, something that is unique maybe in the world that we live in today. There are very opposing views of how to serve the taxpayer and communities. And so for a small company, and as risky as it is, as it may be, you’re much better off in taking a look at what your current ideal client profile is, what your core competencies are, and then doing in this, you know, without engaging a firm at this point, really just investigating on one’s own. These founders, as we know, are very, very bright, very resourceful and and look for opportunities that are more insulated from the election cycle. And I think I think the founder and the founders team are probably capable with technology today, too, you know, because they’re keenly aware of what they do, what problem they solve, what value they bring, and then look for maybe some at this point is hunches and instinct, maybe educated kind of guesses before they walk into a lobbying firm. And why do I say that most lobbying firms, not all, are generalists, not specialists. They’re obviously exceptions. And they’re the type, generally the type of personalities where they’re extremely hard working, they’re very bright, they’re relational capital is extraordinarily useful to a founder, but if you don’t point them or help point them in at least a specific direction, what you what the founder may discover 6 to 8 months down the road, and after investing a significant amount of money or a modest amount of money, depending on on the scope that they engage with, is that they’ve met a lot of important people. They’ve met, they’ve walked the proverbial the halls of a county complex or a state legislature or state agency or even a federal agency, only to find out they’ve met a lot of people with big, important titles. But when they look at their PNL, there’s really nothing to show for it. And so you’ve got to really help point that government relations expert in the right direction, and it will also help the founder. Find a firm that aligns. Best with at least what their what their thesis might be. As I said, most of the firms are generalist, but they often have, like our subject matter experts across a wide range of of areas. And it’s good to to come to a firm with at least a little bit of some understanding of where the low lying fruit is.
Greg Alexander [00:07:48] Excellent advice that’s going to save all of us lots of money and frustration. Okay. My next question was. Understanding legislation. So, you know, our members are reading and watching TV and they see, you know, big bills get passed like the Infrastructure Act and all that. And they’re trying to figure out how to understand it and capitalize on it. So what advice would you give a member when they’re trying to understand a piece of legislation and find an opportunity?
Frank Tsamoutales [00:08:22] A couple of things. Was it? Mark Twain said to things you don’t want to ever watch being made sausage and laws. It’s rough and tumble environment and their legislation is generally a, you know, a manifestation of a lot of influence. Advocacy groups and special interests all have something at stake. And so by the time a piece of legislation passes, generally it has what we like to refer to a lot of stakeholders fingerprints on it. So in terms of doing, you know, how can I how can I as a founder exploit? And I mean that in a moral and ethical way, a piece of legislation to to build my business. What you don’t see at that point, once the legislation is passed, is all the folks that have had impact have written the language. Every line, every word is coming from somewhere, whether it’s a staffer in a cubbyhole with a light bulb hanging over their head you’ll never meet, or one of the usual suspects, whether it be an industry player or a government relations firm, and certainly the legislators and their staff as well. So it’s it’s better to get out front. It’s. Particularly for a founder just delving into this. Quite a risky proposition to react to a large piece of legislation that that on the surface appears to be a great opportunity for them, only for them to find out that, you know, it’s it’s what we call in the south home cooking. Hmm. Having said that. As a founder, a good approach can often be to partner with one of those usual suspects. And I and what I’ve learned from collective 54 and interacting with some of the founders is that they do business for large and medium sized. Firms that have quite robust business pipeline with the government, whether it be state, local or federal. And so approaching them is a good idea to see if they could bolt on to those opportunities so they don’t have to try and sort out all all the details and just provide it, you know, as part of a solution. Now, one of the risks in that is that typically not always the and this is a broad generalization, but it’s something that needs to be sorted out. Is when you’re interfacing with a private sector that will say a client, a founders and was one of their. They’re typically going to be talking to somebody that’s in the commercial side of the business. And one of the things that we focus a lot on, it’s actually become a product that we’ve developed. And I don’t know, but I would imagine other firms do this, too. McKinsey certainly done it, and several other firms that have done some interesting research on this is those commercial practices are not necessarily tied off or reliant or what we say integrated with the public sector side of that firm. So you may have some issues going from, you know, whoever the typical contact is. That you deal with on a day to day basis and transitioning into, you know, partnering with them on a on a government on a government project. But I think knowing that up front informs the founder what questions to ask and if if that firm is not integrated, if that if the prospective partner is not doesn’t have government relations integrated into the private sector sales, then you’re going to have to navigate that. But that’s another way to maybe faster, more efficiently, more effectively get into the market, particularly because you’re leveraging, you know, relationships that are at this point for the founder based on trust and experience a track record and they may be more likely to the client may be more likely to bring you in on some opportunities.
Greg Alexander [00:12:56] So partnering, that’s a great recommendation. And you know, you mentioned the word relationships, which leads me to my last question here, which is members are wondering, you know, should they get involved with elected officials? Should they try to build relationships with, you know, the people that represent them? Any advice in that area?
Frank Tsamoutales [00:13:19] Yeah, absolutely. I mean, you know, I said earlier, elections matter and relationships matter. We all know that business, right, is no different and maybe even more so in in politics and in government is, you know, get involved, get engaged, be prepared if you do for the elected officials when they enter campaign season to reach out and ask for your help, whether it be volunteering or providing financial assistance and that sort of thing, which is another reason why I wouldn’t want I wouldn’t recommend a founder start there just because it could get very expensive and work more, maybe risk more risk associated with saying no to too many of them, only to come back later and ask for some help. So there’s a lot of information to. I gather, before doing something like this. So I would want to know, you know, who historically has been behind that candidate or that elected official, because there could be some unintended consequences. You may find out that they have a long standing relationship with a firm that might be a competitor and they might be less inclined to help. So there’s you know, there’s a lot of due diligence upfront. The other you know, the other piece of that that’s related to that is there’s ways to. Ascertain what competitors are spending, both in donations to elected officials as well as what lobbying firms they’ve hired and how much they’re paying them. So you can get a good analysis of the landscape and make sure that, you know, you’re not talking to somebody, that at the end of the day might be a competitor or a friend of a competitor.
Greg Alexander [00:15:18] So this is fantastic. I mean, today’s short session was just to talk about some broad ideas, and we were very successful in doing that. You know, I’m left with the feeling, as I’m sure our listeners are, there’s so much more to that. So when we have Frank on as our weekly role model and we do our private Q&A session with him, our members will be able to ask frank questions directly regarding this because as you can see, this is multi-layered. But Frank, on behalf of the membership, this is unique. You started off by saying you are unique. I believe that you are. You certainly are to us. You know, many of our members have expressed interest in expanding their firm into the government and they don’t really know how. And just a few things you share with us today have been very helpful. So thank you for being on the show and contributing to the collective.
Frank Tsamoutales [00:16:06] Well, thank you, Greg. I know with the economy taking, we just had the Fed meeting out here in Jackson Hole. You know, there’s some potential black swan events on the lake that are on the horizon. Whether they’ll come to passed or not, who knows? But government is the largest purchaser of goods and services in the country and they’re not going to stop. And this could be a great opportunity for your members to shore up their PNL and even grow their business at a time in an uncertain time.
Greg Alexander [00:16:37] Yeah. Okay. All right. So for those listening, I’m going to give you three calls to action. First, if you’re a member, attend the Q&A with Frank. Look out for the invite. If you’re a candidate for membership, you want to become a member. Go to collect 54 e-commerce site on application, and the app committee will get in contact with you. And then if you just want to learn more directed to my book, The Boutique How to Start Scale and sell a professional services firm, which you can find on Amazon. But with that, I wish everybody good luck and we’ll talk to you soon.